Cryptocurrency trading is a risky activity and can not only lead to profits but also losses for the people who invest in them.
Cryptocurrency trading involves trading price movements in a currency and taking the opportunity to buy and sell an underlying currency through an exchange. Cryptocurrencies have no inherent value, but there is a particularly speculative element to cryptocurrency prices that attracts investors with its root causes.
A system of trading
Being a trader is not something that starts yesterday or today, trading has been around since the old days. It is a way of buying and selling goods or services, trade began a thousand generations ago when the barter system was used.
The way of trading is unique, it begins with the exchange of goods for goods called barter, an easy way to get what you need, with what you have, without spending money. This has become the art and way of trading before money was introduced to differentiate and put a small change in trading.
I said earlier that bartering is an ancient way of trading in ancient times, but we live in a developed world where the past repeats itself and seems new to us because of the technology we live in. Let me use trade with cryptocurrencies for example, cryptocurrencies are one of the ancient ways of exchanging what you have to get what you need, namely "Barter". For example, today I want more Leo in my account, but I don't have the money to get it, so I used the influence of holding Hive and HBD in my wallet to get Leo in my wallet, it's a clear example of bartering. I trade coins to get coins, in the same to make goods for goods which is probably the same with the cryptocurrency trading system.
Although it all starts with money, but cryptocurrencies are only trade today that use the old way of trading, therefore the risk associated with trading by barter or local way will certainly be targeted for cryptocurrencies as well.
We have seen a lot of hype in cryptocurrency trading, whereby people see it as trading that the chance of losses is low, but you can't understand from start when you're still a newcomers to the business.
Cryptocurrency as a whole is a risky activity that can not only make a profit all the time, one way or another there will be little loss associated with it, whether you are a professional in trading or not, two things are sure "profit or loss".
How we invite risk into our trading with cryptocurrency
The cryptocurrency embraces the most less stressed trading right now.
Cryptocurrency is like other trading commodities that exposed to risks arising from market movements. The risk is inherently systematic due to the way the market strategy is adopted and unsystematic due to changes in the fundamentals of the company.
However, most of the losses that are plunged into cryptocurrency trading come from poor research before investing, without proper research, the losses can be greater than the gains, and meanwhile research is the first rule to consider before investing.
Another activity that resulted in losses in cryptocurrency trading is not being able to diversify our portfolio investment across various cryptocurrencies. When currency investment is spread across multiple currencies, the impact of volatility is reduced and it will affect our investment less if something happens to a particular currency, be it loss, taxes or legislation.
While we keep this in mind, we must also determine our trade's exit strategy to weigh profits and losses. Therefore, it is crucial to understand that there is no lossless trading in Cryptocurrency.
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